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First rejection, then dismissal: reconsidering American Pipe tolling for securities class actions.

ABSTRACT

In American Pipe & Construction Co. v. Utah, the Supreme Court created a class action tolling rule, which halted the running of a statute of limitations for all asserted class members of an antitrust suit during the court's certification of the class. Although the Court focused its analysis on the policy behind Federal Rule of Civil Procedure 23, courts purporting to apply the tolling rule have since extended their analyses to such issues as whether the tolling rule is equitable or legal in nature and whether the tolling rule also applies to statutes of repose. Most recently, the Second Circuit held in Police & Fire Retirement System of Detroit v. IndyMac MBS, Inc. that the statute of repose of [section] 13 of the Securities Act cannot be tolled.

This Note examines the Supreme Court's reasoning in American Pipe and the distinct policies behind statutes of repose, arguing that the policies motivating [section] 13's statute of repose are not disserved if the American Pipe tolling rule is extended to circumstances factually similar to those faced by the plaintiffs in IndyMac. Rather, tolling under this limited circumstance is supported by the reasoning in American Pipe, the policies behind Rule 23, and the private-securities-litigation framework more generally.

INTRODUCTION

Envision this scenario: A corporation issues hundreds of mortgage-backed securities to various investors, making repeated misrepresentations and omissions in the offering and sale of the certificates. After discovering these securities violations, the investors timely file numerous suits against the issuer, which the court consolidates into a single certified class action with one named plaintiff. The unnamed plaintiffs, reasonably believing that their claims are represented by the named plaintiff, do not pursue their own actions. Some time later, the court grants a motion filed by the defendant to dismiss the class action because the named plaintiff lacks standing to bring the unnamed plaintiffs' claims. The now nonparty investors quickly attempt to intervene in the class action with their individual claims, only to discover that their claims are now barred by the running of the three-year statute of repose under the relevant securities law. But for the running of the statute of repose, the nonparty investors would have had standing to intervene. Thus, despite their conscientious efforts to bring their claims in a timely fashion, the nonparty investors are left without remedy.

The Second Circuit faced this scenario in Police & Fire Retirement System of Detroit v. IndyMac MBS, Inc. (1) In IndyMac, nonparty investors of a putative class filed individual claims substantially similar to the class's claims after the running of the three-year statute of repose in [section] 13 of the Securities Act ([section] 13). (2) The Second Circuit had to decide whether to apply the class-action tolling rule established in the seminal case American Pipe & Construction Co. v. Utah. (3) In that case, the Supreme Court tolled the statute of limitations for nonparty investors' individual antitrust claims during the pendency of a class action until the definitive resolution of the class. (4) The decision in American Pipe, which explicitly referred only to statutes of limitation, was silent on whether the same tolling rule applied to statutes of repose. (5)

In IndyMac, the Second Circuit noted both this silence and the ambiguity of the source of authority for the American Pipe tolling rule. (6) The court emphasized that it remains unclear whether the American Pipe tolling rule stems from a general equitable power of the federal courts or from a legal interpretation of Federal Rule of Civil Procedure 23 (Rule 23)-the rule governing class actions. (7) Without identifying the authority behind the American Pipe tolling rule, the IndyMac court then outlined the distinctions between statutes of limitations and statutes of repose, defining statutes of limitations as procedural restrictions limiting the availability of a remedy, and statutes of repose as substantive rights of a defendant to be free from vexatious litigation. (8) The court reasoned that tolling statutes of repose would extinguish the very substantive right they are designed to create, and therefore, statutes of repose may be tolled only by legislatively created exceptions. (9) The court also held that courts may not toll statutes of repose regardless of whether the source of the American Pipe tolling rule is equitable or legal. (10) If equitable, then the tolling of statutes of repose is barred by post-American Pipe Supreme Court precedent. (11) If legal, then tolling is barred by the Rules Enabling Act, which gives Congress the power to fashion procedural rules like the Federal Rules of Civil Procedure, but prohibits courts from abridging or modifying a substantive right. (12)

The Second Circuit's decision in IndyMac to deny the benefits of American Pipe tolling to nonparty members in securities class actions hardly seems fair. Nevertheless, other circuit courts of appeals, including the Ninth and Fourth Circuits, have similarly denied tolling of a statute of repose. (13) The Tenth Circuit, however, came to the opposite conclusion in Joseph v. Wiles. (14) The court tolled a statute of repose to afford a reasonable time during which nonparty members could intervene as named parties to the class action or bring individual actions. (15) The Supreme Court granted a writ of certiorari in March 2014 to the IndyMac petitioners to resolve this circuit split and to clarify the confusion generated by the American Pipe tolling rule, although the Court ultimately dismissed the writ as improvidently granted. (16)

This Note urges courts to permit limited tolling of [section] 13's statute of repose for nonparty members in timely securities class actions seeking to intervene after the court has denied class certification. The Second Circuit's focus on the distinctions between statutes of repose and statutes of limitations, and between equitable and legal tolling, is misguided. In American Pipe, the Supreme Court made no such qualifications to its tolling rule and instead focused the thrust of its analysis on the policy behind Rule 23 and the context in which the tolling was requested. (17) Courts should clear away the Second Circuit's doctrinal clutter and reaffirm the approach the Supreme Court took more than forty years ago by allowing limited tolling of [section] 13's statute of repose.

This Note proceeds in three parts. Part I examines the Supreme Court's decision in American Pipe, introduces the differences between statutes of repose and statutes of limitations, and explores the confusion in post-American Pipe case law, most notably the distinction between equitable and legal tolling. Part II describes the circuit split over whether courts have the power to toll statutes of repose. Specifically, Part II compares the position taken by the Tenth Circuit--allowing tolling--to that of the Second Circuit in IndyMac, and highlights the key differences in these courts' analyses. Next, this Note argues that the Second Circuit reached the wrong result in IndyMac. By exploring the policy goals served by statutes of limitations and statutes of repose, Part III asserts that it would not disserve the distinct policy goals served by statutes of repose to allow tolling in situations like that of IndyMac. Part IV concludes, under the same logic set forth in American Pipe, that a limited tolling exception to [section] 13's statute of repose in securities class actions would not violate the Rules Enabling Act because tolling in this context is consistent with the policy goals underlying Rule 23 and the private-securities-litigation framework.

I. AMERICAN PIPE AND ITS LEGACY

In the 1974 American Pipe case, the Supreme Court tolled the running of a statute of limitations until the final determination of the class in an antitrust class action. (18) Since this decision, the lower federal courts have debated extensively the contours and scope of the American Pipe tolling rule, exploring such issues as whether the tolling rule applies beyond the context of antitrust cases and if the rule applies to statutes of repose in addition to statutes of limitations. (19) This Part examines the Supreme Court's reasoning in American Pipe; introduces post -American Pipe case law that purports to apply and expand the tolling rule; and explores further issues raised by subsequent case law, including the distinctions between statutes of repose and statutes of limitations, and those between equitable and legal tolling.

A. The Development of the American Pipe Tolling Rule

In 1964, the United States charged several individuals and companies with criminal antitrust violations of the Sherman Act for colluding to restrain the trade of steel and concrete pipes. (20) After years of extended negotiations with the defendants, the district court entered a final judgment in 1968, in which the defendants agreed to an order enjoining them from engaging in further antitrust violations. (21) Less than a year after the final judgment, the state of Utah timely (22) filed a class action seeking treble damages against the defendants, purporting to represent "public bodies and agencies of the state and local government in the State of Utah who [we]re end users of pipe acquired from the defendants," as well as certain other Western states. (23) At the time Utah filed the suit, the applicable statute of limitations had not yet run on any private claim. (24)

In response to Utah's proposed class action, the defendants moved for an order pursuant to Rule 23(c)(1) (25) declaring that the suit could not be maintained as a class action. (26) Under Rule 23, which governs class actions, (27) a court must declare by order whether the group of litigants may be certified as a class. (28) A court must find the following four features to declare a group a class: numerosity of the class, such that joinder of individual members is impracticable; commonality as to questions of law or fact; typicality as to the claims and defenses of the named plaintiffs and nonparty members of the class; and adequacy of the representatives who will pursue the interests of the class. (29)

The district court agreed with the defendants that the numerosity requirement of Rule 23 had not been satisfied and granted the defendants' motion, thereby dissolving the class. (30) Shortly thereafter, the putative class's nonparty members-including over sixty towns, municipalities, and water districts-filed motions to intervene as plaintiffs in Utah's action. (31) The district court denied the proposed intervenors' motions on the grounds that the applicable four-year statute of limitations had expired during the course of the litigation. (32) On appeal, the Ninth Circuit reversed the district court's decision, tolling the statute of limitations as if the putative intervenors' claims had been filed when Utah originally brought its suit. (33)

In a now often-quoted opinion, the Supreme Court affirmed the Ninth Circuit, holding that "the commencement of the original class suit tolls the running of the statute for all purported members of the class who make timely motions to intervene after the court has found the suit inappropriate for class action status." (34) The Supreme Court's analysis relied heavily on the purpose of and policies served by Rule 23, allowing tolling because to hold otherwise would "frustrate the principal function of a class suit" and create a "multiplicity of activity which Rule 23 was designed to avoid." (35) The Court explained:

   Whatever the merit in the conclusion that one seeking to join a
   class after the running of the statutory period asserts a "separate
   cause of action" which must individually meet the timeliness
   requirements, such a concept is simply inconsistent with Rule 23 as
   presently drafted. A federal class action is no longer "an
   invitation to joinder" but a truly representative suit designed to
   avoid, rather than encourage, unnecessary filing of repetitious
   papers and motions. (36)


The Court further analyzed whether its rule was consistent with "the functional operation of a statute of limitations," considering such factors as whether the defendants were on notice, if the claims were stale, and whether justice was promoted. (37) Concluding that the defendants had the "essential information necessary to determine both the subject matter and size of the prospective litigation" (38) within the time period set by the statute of limitations, the Court reasoned that tolling in this context did not threaten the policy goals served by the statute of limitations. (39) Finally, the Court rejected the argument that its tolling of the statute of limitations was "breaking new ground" (40) or abridging the defendants' substantive rights in violation of the Rules Enabling Act. (41) Citing to other instances in which it had exercised a right to toll statutes of limitations, (42) the Supreme Court noted that the federal courts may create limited exceptions to otherwise-binding limitations periods if doing so is consistent with legislative purpose. (43) This means that a court does not necessarily affect the defendant's underlying substantive rights by tolling a limitations period in certain circumstances. (44)

The Supreme Court subsequently clarified in an employment-discrimination suit, Crown, Cork & Seal Co. v. Parker, (45) that the American Pipe tolling rule applies not only to putative class members seeking to intervene after denial of class certification, but also to those within the putative class who later file their own individual actions. (46) Additionally, Crown demonstrated that the American Pipe tolling rule applies outside of its original antitrust context. (47) In Crown, the Court allowed the plaintiff to file his Title VII suit outside of the required ninety-day period, as the limitations period for his claim was tolled while there was a pending timely class action of which the plaintiff was a putative member. (48)

Unfortunately, even though many federal courts have examined the implications and limits of the American Pipe tolling rule, much uncertainty still abounds decades after American Pipe. (49) This post-American Pipe confusion may be distilled to the following pair of questions: First, what are the distinctions between statutes of repose and statutes of limitations, and between equitable and legal tolling? And second, how do these distinctions impact the application of the American Pipe tolling rule outside of its original context?

B. A Distinction Between Statutes of Repose and Statutes of Limitations?

The American Pipe tolling rule explicitly addressed only statutes of limitations, which left open the question of whether the rule applies to statutes of repose as well. Since American Pipe, several courts have sought to answer this question by examining the differences in purpose and effect between statutes of repose and statutes of limitations. (50)

Though statutes of limitations are often mistakenly equated with statutes of repose, (51) these limitations periods are distinct. (52) Statutes of limitations are procedural limitations that begin to run when the underlying causes of action accrue, typically at the time of injury. (53) Conversely, statutes of repose limit the time during which an action may be brought, unrelated to the accrual of the cause of action. (54) Statutes of repose are treated as substantive rights of a defendant to be free from litigation after the repose period expires.'5 In short, both types of limitations periods are guided by similar policy concerns, (55) but differ primarily in how their limitations periods are triggered.

C. Lampf's Gloss on American Pipe: The (Blurred) Line Between Equitable and Legal Tolling

Courts have long recognized two forms of tolling--legal and equitable--in connection with statutes of limitations, but they disagree on the justifications for each form of tolling, and whether these tolling rules also extend to statutes of repose. (56) Equitable tolling is a doctrine that halts the running of a statute of limitations in select situations involving unfairness or excusable mistake. (58) It is generally available to plaintiffs who, through extraordinary circumstances, are prevented from exercising their rights. (59) Courts will invoke equitable tolling only when compelling justifications so demand. (60) Conversely, legal tolling is derived from the normal process of statutory construction, (61) and, in the context of class actions, "occurs any time an action is commenced and class certification is pending." (62)

Certain courts have tried to use the distinctions between these types of tolling to limit the import of the American Pipe tolling rule by focusing on the Supreme Court's subsequent decision in Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson. (63) In Lampf, investors brought a securities-fraud action under [section] 10(b) of the Securities Exchange Act against a law firm. (64) The Supreme Court held that equitable tolling was not applicable to the three-year statute of repose under [section] 10(b). (65) Writing that the "equitable tolling doctrine is fundamentally inconsistent with the 1-and-3-year structure," (66) and "[b]ecause the purpose of the 3-year limitation is clearly to serve as a cutoff, ... tolling principles do not apply to that period." (67)

Many courts have since interpreted Lampf as qualifying the American Pipe tolling rule, suggesting that Lampf stands for the broad proposition that courts may no longer equitably toll statutes of repose. (68) This interpretation has changed the application of the American Pipe tolling rule from a balanced, fact-specific determination to a purely categorical, legal-equitable distinction--that is, after Lampf, several courts have based their determinations of whether to toll a statute of repose on whether the tolling would be legal or equitable rather than on the considerations identified by the Supreme Court in American Pipe: the policies behind Rule 23 and the general context of the tolling. (69) The holding in Lampf hinged on the classification of the limitations period as a statute of repose and of the tolling as equitable in nature. The decision thus paved the way for subsequent courts applying the American Pipe tolling rule to engage in similar classifications. (70) In fact, many courts have purported to apply the American Pipe tolling rule to bar tolling of statutes of repose using Lampf's categorical approach. First, lower courts labeled limitations periods as either statutes of limitations, which may be equitably tolled under American Pipe, or as statutes of repose, which may not be equitably tolled under Lampf. (71) Then, the lower courts split over whether a statute of repose like that of [section] 13 may be legally tolled. On one hand, the Tenth Circuit held that Lampf did not bar the legal tolling of statutes of repose, only equitable tolling. (72) The court understood the tolling in American Pipe to be rooted in the Supreme Court's construction of Rule 23, and thus found no conflict with Lampf which bars only equitable tolling. (73) On the other hand, the Second Circuit held that whether the tolling is characterized as equitable or legal, the American Pipe tolling rule does not apply to statutes of repose. (74) The court reached this result by relying heavily on the Rules Enabling Act. (75) The Fourth Circuit has likewise held that a statute of repose may not be tolled, whether equitably or legally, (76) while the Ninth Circuit has left open the possibility of tolling statutes of repose in limited contexts. (77) The holdings in these cases all rely on the categorization of the desired tolling as legal or equitable and of the limitations period as a statute of repose or a statute of limitations, even though American Pipe does not turn on these distinctions. Together, this array of cases presents a confusing body of divergent precedent that has distracted courts from a faithful application of the American Pipe tolling rule.

This Note argues that these courts have wrongly qualified the American Pipe rule. The courts' analyses in these cases focus heavily on the distinction between equitable and legal tolling, whereas the American Pipe decision did not so categorize its reasoning. Rather than adhering to a clear reading of the American Pipe decision, the lower federal courts have produced a tangled and misleading mix of jurisprudence. The concerns at the heart of the Supreme Court's decision in American Pipe did not relate to the distinctions between legal and equitable tolling or between statutes of repose and statutes of limitations. Instead, the decision centered on concerns that arise from the policies served by Rule 23. (78)

Though this Note concedes that there are differences in the policy goals served by statutes of repose and those served by statutes of limitations, (79) it argues that these differences are irrelevant in the context of IndyMac. An examination of these different policy goals suggests that a limited exception allowing tolling for nonparty members of securities class actions--which would remedy a major unfairness currently imposed on plaintiffs--would not disserve the policy goals of statutes of repose. Rather than dwell on the blurred line between equitable and legal tolling, this Note urges courts to focus first on the driving force behind American Pipe's analysis--the policies behind Rule 23 and the context in which the need for tolling arises--and second, to consider whether these same policy concerns warrant the expansion of the American Pipe tolling rule to [section] 13's statute of repose.

II. INDYMAC. THE SECOND CIRCUIT'S DIVERGENCE FROM OTHER COURTS

Prior to the Second Circuit's decision in IndyMac, various plaintiffs tested the limits of the American Pipe tolling rule, and several courts held that the American Pipe tolling rule applies to securities class actions. For example, in Joseph v. Wiles, an aftermarket purchaser of convertible debentures issued by the defendant sought to bring claims after the expiration of [section] 13's three-year repose period. (80) The plaintiff argued that the repose period had been tolled by an earlier-filed class action. (81) Siding with the plaintiff, the Tenth Circuit held that the repose period was tolled while the court considered certification of the earlier-filed class action. (82) The court, consistent with American Pipe, premised its decision on the policies served by Rule 23, (83) and distinguished the tolling it invoked as legal and distinct from the equitable tolling of statutes of repose barred by Lampf. (84) The court determined that allowing legal tolling would serve the purpose behind Rule 23, (85) and that to find otherwise would leave many putative class members without recourse if class certification was ultimately denied. (86) Finally, the court reasoned that allowing tolling in this limited situation would not compromise the purpose behind [section] 13's statute of repose: protecting defendants from being unfairly surprised by untimely claims. (87) Several lower courts have likewise held that the American Pipe tolling rule applies to statutes of repose. (88)

A. The IndyMac Decision

The Second Circuit's decision in IndyMac reflects a very different application of the American Pipe tolling rule. In IndyMac, several institutions filed a class action against the officers, directors, underwriters, and entity of IndyMac MBS, Inc., an issuer of mortgage-backed securities, for fraudulent misrepresentations and omissions in the offering and sale of financial instruments to the plaintiffs. (89) The plaintiffs held securities offered in different tranches, but flowing from the same "base" prospectus for all tranches of the offering. (90) The Police and Fire Retirement System of the City of Detroit (Detroit PFRS), and the Wyoming State Treasurer and the Wyoming Retirement System (collectively, "Wyoming") each filed separate class actions, which the district court subsequently consolidated into one action. (91) The court selected Wyoming over Detroit PFRS as lead plaintiff, pursuant to the Private Securities Litigation Reform Act (PSLRA). (92) Despite being the only named plaintiff, Wyoming raised claims on behalf of the other asserted class members. (93) Neither Wyoming nor Detroit PFRS appears to have considered the possibility that Wyoming could not bring claims on behalf of the other plaintiffs, (94) a reasonable attitude considering that the court had consolidated the two suits that were initially filed separately.

To the plaintiffs' great surprise, the district court held that Wyoming had standing to sue only with respect to the specific tranches of securities it had purchased, and dismissed the claims related to securities within different tranches held by nonparty members of the putative class, including Detroit PFRS. (95) The court found that Wyoming had failed to make the "necessary showing of injury as to the offerings of securities that they did not purchase," as required to demonstrate Article III standing. (96) At the time of the court's decertification of the class, [section] 13's three-year statute of repose had run. (97)

Following the dismissal of their claims, the nonparty members moved to intervene as named plaintiffs pursuant to Rule 24. (98) They set forth two theories: first, that the American Pipe tolling rule preserved their right to sue, and second, that Rule 15(c) allowed them to "relate back" (99) their claims to the surviving claims in the original complaint. (100) The district court denied the nonparty members' motion, holding that the American Pipe tolling rule does not apply to [section] 13's statute of repose. (101) The court further held that the relation-back doctrine under Rule 15(c) does not allow unnamed, putative members of a class to intervene in a class action as named parties to revive claims that were dismissed from the class complaint for lack of jurisdiction. (102)

The Second Circuit commenced its analysis with a brief history of the American Pipe decision, characterizing its tolling as equitable. (103) Applying post-American Pipe case law, the court found that the statute of repose could be subject only to legislatively created exceptions--that is, legal tolling. (104) The court classified [section] 13's three-year limitations period as a statute of repose, which therefore creates "a substantive right in those protected to be free from liability after a legislatively-determined period of time," (105) stressing that statutes of repose are not subject to equitable tolling. (106) However, the court conceded that there was no consensus as to whether the American Pipe tolling rule is equitable or legal in nature. (107)

Nevertheless, the court reasoned that this lack of consensus was irrelevant. First, the court insisted that if the tolling in American Pipe was equitable, tolling of the statute of repose would be barred by the Supreme Court's decision in Lampf. (108) Conversely, if the tolling in American Pipe was legal, then tolling of the statute of repose would be an improper modification of the defendant's substantive right to be free from litigation in violation of the Rules Enabling Act. (109) Finally, the court dismissed the plaintiff's arguments based on the Rule 15 relation-back doctrine because of the existing plaintiffs' lack of standing. (110)

B. The Circuit Split

The Second Circuit's decision in IndyMac created a circuit split from the Tenth Circuit on several key issues. First, after IndyMac, courts became divided over whether American Pipe tolling is legal or equitable in nature. (111) Courts grapple with this question because a categorization as equitable could bar the tolling of a statute of repose under Lampf. (112) For example, the Second Circuit in IndyMac wrote that the American Pipe Court "seemed to rely on the equitable power of the courts to toll statutes of limitations," as an argument in favor of disallowing tolling. (113) Conversely, the Tenth Circuit noted in Joseph v. Wiles that "the tolling Mr. Joseph claims [under similar facts] is the legal tolling that occurs any time an action is commenced and class certification is pending," and found Lampf insufficient precedent to bar tolling. (114)

Second, courts disagree over the effect, if any, of characterizing a limitations period as either a statute of repose or a statute of limitations. The Second Circuit emphasized that "statutes of repose create[] a substantive right ... to be free from liability after a legislatively-determined period of time." (115) On the other hand, although the Tenth Circuit has recognized that statutes of repose "are intended to demarcate a period of time within which a plaintiff must bring claims or else the defendant's liability is extinguished," (116) the court has not held that statutes of repose create substantive rights. Furthermore, although the Tenth Circuit mentioned legal tolling in its decision, it also mused that "in a sense, application of the American Pipe tolling doctrine to cases such as this one does not involve 'tolling' at all," arguing that, instead, Mr. Joseph should have been treated as a member of the class. (117)

Finally, the circuits disagree over whether statutes of repose confer a substantive right on the defendant and, if so, whether tolling statutes of repose modifies that right in violation of the Rules Enabling Act. (118) The Second Circuit has concluded that tolling [section] 13's statute of repose would violate the Rules Enabling Act, (119) while the Tenth Circuit does not acknowledge the existence of a substantive right created by [section] 13, and thus finds no such violation. (120) Interestingly, the Supreme Court in American Pipe considered and dismissed a similar argument--questioning whether tolling was inconsistent with the Rules Enabling Act--with respect to the statute of limitations at issue in that case. (121)

The Second Circuit focused on the subsequent case law interpreting American Pipe rather than on the actual analysis in American Pipe. This subsequent case law stresses the classification of the tolling as legal or equitable, treating the American Pipe tolling rule as if it is driven solely by equitable considerations or by the analysis of the text of Rule 23. (122) Such a cursory application ignores the American Pipe Court's deeper concern with the policies behind class actions. Greater clarity would result if courts recognized that there are several distinct issues: whether the language in question is a statute of repose or a statute of limitations; and, if this distinction matters, whether the policies underpinning Rule 23, as set forth in American Pipe, justify the tolling of a limitations period in the securities class actions; and, lastly, whether a limited tolling exception jeopardizes the distinct policies served by statutes of repose.

III. STATUTE OF LIMITATIONS OR STATUTE OF REPOSE: A DISTINCTION WITHOUT A DIFFERENCE?

Although the federal courts have expended much effort and ink in distinguishing statutes of repose from statutes of limitations, the policies served by both overlap significantly. (123) Moreover, when these policies are examined in the context of securities class actions--in which nonparty members attempt to intervene after decertification of a putative class action--any distinction between statutes of limitations and statutes of repose becomes irrelevant. This Part reviews the policies behind statutes of limitations and statutes of repose to demonstrate that allowing tolling in the narrow context of IndyMac does not disserve the policy goals behind either.

Both statutes of repose and statutes of limitations seek to promote repose, which has led many courts to confusingly state that a "statute of limitations is a statute of repose." (124) By this, courts mean that statutes of limitations are a subset of statutes of repose, such that all statutes of limitations are statutes of repose, but not all statutes of repose are statutes of limitations. (125) Statutes of limitations are procedural limits that exist independently of the merits of the underlying cause of action (126) and "create[] an affirmative defense" for the defendant when the plaintiff fails to bring his claim in a timely fashion. (127) The limitations period in a statute of limitations runs from the time the plaintiff discovers or reasonably should have discovered the defendant's misconduct giving rise to the plaintiff's claim. (128) Conversely, statutes of repose are triggered by an event--usually the defendant's misconduct--regardless of whether the plaintiff has discovered or reasonably should have discovered the misconduct. (129)

Both statutes of repose and statutes of limitations are the products of a balancing act between two competing sets of policies--preventing "untimely claims" and "encouraging the resolution of all claims ... on their substantive merits." (130) A major aim of limitations periods is to promote repose. (131) The promotion of repose first requires that a defendant be allowed peace of mind. (132) As a society, we have decided that it is unfair to subject potential defendants to the perpetual, indefinite threat of litigation. Thus, at a certain point, a defendant should be relieved of the fear that he will have to account for past misconduct. (133) Second, the legal system should attempt to respect a defendant's expectations as they arise over time. After many years, a defendant may make investments or decisions based on the alleged past misconduct, assuming it may no longer be litigated. (134)

Apart from the desire to safeguard potential defendants, evidentiary concerns also motivate these limitations periods. Preserving the integrity of evidence is crucial to ensuring accurate fact-finding, (135) to preventing fraud in filing or litigating claims, (136) to reducing litigation costs, (137) and to preserving the integrity of the legal system. (138) Additionally, limitations periods help to place defendants and plaintiffs on equal footing. A time delay could work to the disadvantage of a defendant because "the plaintiff [could] take steps to preserve evidence favorable to his or her case while evidence that disfavors the defendant deteriorates." (139) The limitations periods should operate to put defendants on notice to prepare for litigation. (140) Finally, the existence of limitations periods promotes diligence. By setting a limited time during which plaintiffs must bring claims, the limitations periods discourage plaintiffs from sleeping on their rights and then bringing stale claims. (141)

Despite these many policy goals favoring the enforcement of limitations periods, there is a strong countervailing policy goal that "seeks to dispose of litigation on the merits rather than on procedural grounds. (142) In a general sense, the legal system exists to resolve disputes on their substantive merits under the applicable law. (143) Doing so "comports with fundamental notions of fairness and due process of law, (144) and satisfies the widespread belief that the law should be obeyed and meritorious claims should be vindicated. (145) Limitations periods may appear to unfairly deny plaintiffs their day in court, and statutes of repose are particularly susceptible to appearing unfair because they may run before the plaintiff has discovered, or should have discovered, the defendant's misconduct. (146)

Though statutes of limitations and statutes of repose share these many policy goals, courts nonetheless distinguish statutes of repose as creating an underlying substantive right for the defendant to be free from litigation. (147) Statutes of repose exist primarily to promote finality, (148) whereas statutes of limitations are designed for "the more limited function of reducing the evidentiary inquiries created when defendants are forced to defend stale claims." (149) It is this subtle difference in the focus of statutes of limitations and statutes of repose that helps explain why the former runs from the time of discovery of the alleged wrongdoing and the latter from the time of the alleged misconduct. Statutes of repose recognize that after a certain amount of time, defendants should be certain that they will not be sued for past misconduct. (150)

To determine whether it is appropriate to toll a limitations period, some scholars propose a cost-benefit analysis weighing these various policy goals:

   From a purely economic point of view, the statute of limitations
   should bar a claim only when the sum of all costs incurred if the
   claim is not barred ... outweights] the sum of all costs of not
   implementing the substantive law in what is probably a relatively
   small subset of cases. If the cost-benefit analysis has been
   properly calibrated, then the loss of a valid claim is an
   unfortunate, but necessary consequence of a trade-off that has been
   made to maximize social welfare. (151)


Regardless of the analytical method used, the appropriateness of tolling a limitations period should be constantly reevaluated because the policies that justify a limitations period in one scenario might not do so in another. (152) To argue for a limited exception here--tolling for nonparty members in timely securities class actions in which the court subsequently denies class certification--is not to argue for the allowance of all forms of tolling for all statutes of repose.

A look to another exception--which allows tolling of statutes of repose in cases of fraudulent concealment--is illustrative. The fraudulent-concealment exception is justified because the policy goals that might support a firm limitations period, such as protecting a defendant from stale claims, are not disserved in cases of ongoing fraud. It is impossible for a defendant to assert that the plaintiffs' claims are foreign to him when the defendant worked to cover up the source of those claims from the plaintiffs in the first place. (153) As Justice Story eloquently pointed out:

   [E]very statute is to be expounded reasonably, so as to suppress,
   and not to extend, the mischiefs, which it was designed to cure.
   The statute of limitations was mainly intended to suppress fraud,
   by preventing fraudulent and unjust claims from starting up at
   great distances of time, when the evidence might no longer be
   within the reach of the other party, by which they could be
   repelled. It ought not, then, to be so construed, as to become an
   instrument to encourage fraud, if it admits of any other reasonable
   interpretation.... (154)


In light of this remark, courts should remember that repose is not an absolute value. (155)

Should a court conduct such a balancing test, looking to the relative strengths of the competing policies behind both statutes of repose and statutes of limitations, that court would find that any distinction between the statute of limitations and statute of repose under [section] 13 is insignificant. For, as with the fraudulent-concealment exception, allowing limited class-action tolling in the context of IndyMac does not disserve the primary goal behind [section] 13's statute of repose: to prevent defendants from facing the threat of unknown litigation after a certain amount of time. Rather, a balancing of the competing policy goals behind limitations periods actually weighs in favor of allowing an exception. (156)

In IndyMac, for example, the defendants could not have reasonably argued that they were not on notice of the putative intervenors' claims, nor that tolling would hurt their "peace of mind." (157) Until the motion to deny class certification was resolved in their favor, the defendants likely anticipated having to defend all of the plaintiffs' claims. (158) They were not, for example, in limbo with the fear of potential litigation from past misconduct adversely affecting their investments or other transactional decisions. (159) Additionally, class-action tolling would not force the defendants in IndyMac to face stale claims--the putative class had already alleged the same claims that the intervenors later attempted to raise. (160) The defendants, before learning that the court would grant their motion to deny class certification (after initially granting class certification), should have been gathering evidence, preparing witnesses, and readying themselves for litigation. (161)

Additionally, even accepting that [section] 13's statute of repose creates a substantive right for the defendant to be free from litigation, that substantive right is not challenged. In IndyMac, the putative intervenors were forced to reassert the claims that had already been brought in the initial class action, but only because of a mistake on the court's part in first certifying the class and then requiring the break up of the class. (162) Moreover, the policies that disfavor limitations periods are strongly implicated under the facts of IndyMac. It hardly seems fair for plaintiffs who are unnamed, but unquestionably known, to be denied the opportunity to plead their case because of the court's delay in refusing to grant class certification, or the court's choice to revoke its earlier certification of a class after the running of the limitations period. To refuse tolling here is to dispose of a case not on the merits, but because of a procedural mistake attributable to the court itself. These considerations, coupled with the fact that it does not disserve the goal behind statutes of repose to allow tolling in this limited context, strongly weighs in favor of a tolling exception.

IV. RETURNING TO A FAITHFUL INTERPRETATION OF AMERICAN PIPE

The Second Circuit concluded in IndyMac that even if the court were to label the American Pipe tolling rule as "legal" or rooted in statute, the Rules Enabling Act would nonetheless bar application of the tolling rule to [section] 13's statute of repose. (163) The Second Circuit held that allowing plaintiffs more time to bring claims in excess of the three years set forth in the repose period would amount to a substantial modification of the defendant's right to be free of litigation. (164) However, the Supreme Court in American Pipe rejected a similar argument--that allowing tolling of a statute of limitations would violate the Rules Enabling Act-and it is difficult to see why that reasoning should not also apply in the IndyMac context. (165)

In fact, there is plenty to suggest that the reasoning of the Supreme Court in American Pipe can and should apply to the facts of IndyMac. When the Supreme Court first created the class-action tolling rule, courts did not distinguish between substantive statutes of repose and procedural statutes of limitations by strictly categorizing the limitations period. (166) For example, in 1979, the Supreme Court ambiguously stated: "Statutes of limitations ... are statutes of repose." (167) Thus, it is hardly surprising or significant that the Supreme Court did not emphasize this distinction in American Pipe. Rather, instead of using the modern repose-limitations categories that were central to the IndyMac decision, the American Pipe Court was asked by defendants to consider whether tolling would violate the Rules Enabling Act using a substance-procedure dichotomy. (168)

Under its Rules Enabling Act analysis, the American Pipe Court then rejected the substance--procedure dichotomy in favor of a legislative-intent approach--whether tolling the limitations period in a given context is "consonant with the legislative scheme." (169) The Court emphasized that it was not breaking ground with its decision to allow tolling, (170) and that its rule was consistent with the structure of Rule 23 and its underlying purpose. (171) Given this analysis, the Second Circuit likely incorrectly characterized the American Pipe tolling rule as a purely textualist interpretation of Rule 23, ignoring the Supreme Court's focus in American Pipe on the policies served by class actions. (172)

A proper reading of American Pipe would have yielded the opposite result in IndyMac, as tolling is fundamentally consistent with both the purposes of [section] 13's statute of repose and the overall legislative scheme behind private securities litigation. First, Congress enacted the 1934 securities laws to amend the [section] 13 limitations period, lowering it from ten years to three years to give finality to corporations and to calm the threat to defendants of lingering liability that might hinder the day-to-day functioning of business operations. (173) As discussed in Part I.B., [section] 13's repose period is treated as a substantive right of defendants to be put on notice of claims stemming from the defendants' conduct within a certain period following that conduct. (174) The filing of the putative class action achieves all of these goals. In IndyMac, for example, the defendants were certain of both the exact number of potential plaintiffs comprising the class and the extent of their grievances as soon as the class complaint was filed. (175) Thus, the defendants should have had all the information they needed before them to adequately prepare for the putative intervenors' claims with identical causes of action arising out of the same conduct. (176) To allow tolling in this limited context would not hinder the purpose of [section] 13's statute of repose.

Second, tolling is consistent with the overall legislative scheme behind private securities litigation. Modern securities litigation is largely framed by Rule 23 and the PSLRA. Rule 23 exists to allow multiple plaintiffs to aggregate their claims in a single class action. (177) Moreover, given that Rule 23 was enacted several years after the Securities Act, and Rule 23's modern iteration--under which class members are automatically bound unless they opt out of the class--was enacted several decades after the Securities Act, Congress could not have imagined the issue confronted by the Second Circuit in IndyMac. (178) It seems highly unlikely, at best, that Congress would have enacted a legislative scheme under which plaintiffs bring claims in a timely fashion, and defendants are aware of the extent of these claims and have sufficient time to prepare for litigation, but courts should nonetheless bar these claims from determination on the merits because of a yet-unrealized procedural quirk.

The PSLRA also encourages the aggregation of individual claims by requiring early notice to putative class members and the appointment of a lead plaintiff after the class action is filed to manage the litigation on behalf of the other class members. (179) Under the PSLRA, major stakeholders have strong incentives to serve as the lead plaintiff on behalf of the other class members to ensure that their relatively larger financial interests are furthered. (180) The Second Circuit's argument in IndyMac, that the PSLRA does not support tolling in this scenario because Congress did not intend the PSLRA to excuse parties from sleeping on their rights, is misplaced. (181) The IndyMac plaintiffs who sought to intervene in the action after the running of [section] 13's repose period had already brought their claims, which the court subsequently consolidated into a single class action before ultimately decertifying the class. (182) The plaintiffs hardly slept on their rights.

Thus, under the Second Circuit's approach, conscientious plaintiffs will be pressured to disaggregate their claims by filing duplicative, individual suits to ensure that they are not likewise denied their day in court. Both Rule 23 and the PSLRA are structured to channel as many claims as possible arising from the same instance of fraud into a single action with a single named plaintiff. The decision in IndyMac undermines this framework. Instead of encouraging the efficient aggregation of claims, the Second Circuit's decision encourages the packed rush to the courthouse that Rule 23 and the PSLRA were designed to avoid.

Nevertheless, the Second Circuit's misreading of American Pipe is understandable. At first glance, a class-action tolling rule relating to a statute of limitations in an antitrust action seems to bear little relation to the tolling of [section] 13's statute of repose. Such a cursory understanding of the American Pipe tolling rule, however, is neither appropriate nor accurate. If courts follow the Second Circuit's approach in IndyMac, they would encourage parties to engage in a race to file suits preserving their individual causes of action. Such plaintiffs would attempt to hedge against a later decision by the court to decertify the class or remove certain claims because the lead plaintiff lacks standing to bring them. (183) Moreover, an absolute bar on tolling statutes of repose would impair plaintiffs' rights to opt out from class-action litigation. (184) IndyMac forecloses such a possibility, requiring courts to apply the American Pipe tolling rule before determining whether the chosen representatives have fairly represented the class's interests. Following IndyMac's approach would result in a surge of litigation that would not only fail to further substantive rights created for defendants by [section] 13's statute of repose, but would significantly burden the resources of defendants, plaintiffs, and the courts alike. (185) Finally, such an approach would ignore the Supreme Court's rich analysis in American Pipe, which took into account the legislature's purpose in enacting Rule 23.

CONCLUSION

The seminal American Pipe decision established a class-action tolling rule for statutes of limitations that is applicable when putative class members attempt to intervene in a class after the running of the limitations period. However, since the American Pipe decision, this tolling rule has been interpreted and applied in various contexts by an array of courts. Although several of these courts stayed true to the reasoning at the heart of American Pipe, others have strayed and muddied the waters, creating unnecessary and unclear distinctions between statutes of repose and statutes of limitations, and between equitable and legal tolling.

This Note argues that even if a court acknowledges the distinction between statutes of limitations and repose, and between equitable and legal tolling, the policies motivating [section] 13's statute of repose are not disserved by extending the American Pipe tolling rule to cover circumstances factually similar to those faced by the plaintiffs in IndyMac. American Pipe did not turn on categorical distinctions or a strict interpretation of the text of the Federal Rules of Civil Procedure, but rather on considerations of the policies behind Rule 23 and the context in which the action arose. Such considerations apply with equal force to the circumstances surrounding IndyMac. Finally, because tolling would not disserve the policies motivating [section] 13's statute of repose and the private-securities-law framework at large, a limited tolling exception would not violate the Rules Enabling Act under the standard set forth in American Pipe. Thus, despite the Second Circuit's recent opinion in IndyMac to the contrary, courts should find that precedent, the policies underlying Rule 23 and the PSLRA, and common notions of fairness all point to extending American Pipe tolling to [section] 13's statute of repose.

(1.) Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013), cert, granted sub nom. Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., 134 S. Ct. 1515 (2014), cert, dismissed as improvidently granted, No. 13-640, 2014 WL 4799891 (Sept. 29, 2014).

(2.) Id. at 103. Section 11 of the Securities Act of 1933 lays out the civil liabilities incurred on account of a false registration statement. 15 U.S.C. [section] 77k (2012). Section 13 specifies the relevant limitations periods that apply to [section] 11 claims. Id. [section] 77m. Section 13's statute of repose reads: "In no event shall any such action be brought to enforce a liability created under section 77k or 77/(a)(l) of this title more than three years after the security was bona fide offered to the public, or under 77/(a)(2) of this title more than three years after the sale." Id.

(3.) Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974).

(4.) Id. at 552-53.

(5.) See id. at 558 ("In recognizing judicial power to toll statutes of limitation in federal courts we are not breaking new ground." (emphasis added)).

(6.) IndyMac, 721 F.3d at 107-08.

(7.) Id. at 104-05.

(8.) Id. at 106. See infra Part I.B for further discussion of the distinction between statutes of repose and statutes of limitations.

(9.) IndyMac, 721 F.3d at 106.

(10.) Id. at 109. The Second Circuit deviated from a near-unanimous string of lower-court cases that did apply American Pipe tolling to [section] 13's statute of repose. See, e.g., In re Morgan Stanley Mortg. Pass-Through Certificates Litig., 810 F. Supp. 2d 650, 666-70 (S.D.N.Y. 2011); Me. State Ret. Sys. v. Countrywide Fin. Corp., 722 F. Supp. 2d 1157, 1166 (C.D. Cal. 2010); In re Flag Telecom Holdings, Ltd. Sec. Litig., 352 F. Supp. 2d 429, 455-56 (S.D.N.Y. 2005). But see Footbridge Ltd. Trust v. Countrywide Fin. Corp., 770 F. Supp. 2d 618, 624-27 (S.D.N.Y. 2011) (rejecting American Pipe tolling).

(11.) IndyMac, 721 F.3d at 109 (citing Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 363 (1991)).

(12.) Id. The Rules Enabling Act authorizes the Supreme Court "to prescribe general rules of practice and procedure" provided that "[sjuch rules shall not abridge, enlarge, or modify any substantive right." 28 U.S.C. [section] 2072 (2012). See infra Part IV for further discussion of the Rules Enabling Act, 28 U.S.C. [section][section] 2071-2077 (2012).

(13.) See, e.g., Wong v. Beebe, 732 F.3d 1030, 1048 (9th Cir. 2013) (en banc) (stating that "a statute of repose is not subject to equitable tolling"), cert, granted sub nom. United States v. Wong, 82 U.S.L.W. 3541 (U.S. June 30, 2014) (No. 13-1074); First United Methodist Church of Hyattsville v. U.S. Gypsum Co., 882 F.2d 862, 866 (4th Cir. 1989) ("[A] statute of repose is typically an absolute time limit beyond which liability no longer exists and is not tolled for any reason because to do so would upset the economic balance struck by the legislative body.").

(14.) Joseph v. Wiles, 223 F.3d 1155 (10th Cir. 2000).

(15.) Id. at 1168.

(16.) See Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013), cert, granted sub nom. Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., 134 S. Ct. 1515 (2014), cert, dismissed as improvidently granted, No. 13-640, 2014 WL 4799891 (Sept. 29, 2014). On September 15, 2014, the parties to In re IndyMac Mortgage-Backed Securities Litigation reached a proposed $340 million settlement. Order, In re IndyMac Mortgage-Backed Sec. Litig., 793 F. Supp. 2d 637 (S.D.N.Y. 2014) (No. 09-CV-4583). The Supreme Court dismissed the writ of certiorari as improvidently granted on September 29, 2014. Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., No. 13-640, 2014 WL 4799891, at *1 (Sept. 29, 2014).

(17.) See infra note 35 and accompanying text.

(18.) Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538,552-53 (1974).

(19.) See supra notes 13-14 and accompanying text.

(20.) Am. Pipe, 414 U.S. at 540.

(21.) Id. at 540-41.

(22.) The class action was considered timely, as it was filed within a year of the district court's entry of final judgment. Under [section] 5(b) of the Clayton Act, "[w]henever any civil or criminal proceeding is instituted by the United States to prevent, restrain, or punish violations of any of the antitrust laws, ... the running of the statute of limitations ... shall be suspended during the pendency thereof and for one year thereafter...." 15 U.S.C. [section] 16(i) (2012).

(23.) Am. Pipe, 414 U.S. at 541.

(24.) Id.

(25.) Rule 23(c)(1) reads, "[a]t an early practicable time after a person sues or is sued as a class representative, the court must determine by order whether to certify the action as a class action." Fed. R. Civ. P. 23(c)(1).

(26.) Am. Pipe, 414 U.S. at 542.

(27.) Fed. R. Civ. P. 23.

(28.) Fed. R. Civ. P. 23(c).

(29.) Fed. R. Civ. P. 23(a).

(30.) Am. Pipe, 414 U.S. at 543.

(31.) Id. at 543-44. The nonparty members sought to intervene pursuant to Federal Rule of Civil Procedure 24 (Rule 24). Id. Rule 24(b)(2) states, "[o]n timely motion, the court may permit a federal or state governmental officer or agency to intervene if a party's claim or defense is based on: (A) a statute or executive order administered by the officer or agency; or (B) any regulation, order, requirement, or agreement issued or made under the statute or executive order." Fed. R. Civ. P. 24(b)(2).

(32.) The district court held that the statute of limitations imposed by [section] 4B of the Clayton Act had run throughout the course of the litigation. Am. Pipe, 414 U.S. at 544.

(33.) The Ninth Circuit reversed the district court's decision to deny the nonparty members' motion to intervene under Rule 24(b)(2), holding that "as to members of the class Utah purported to represent, and whose claims it tendered to the court, suit was actually commenced by Utah's filing." Id. at 545 (quotation mark omitted). The court reasoned that the order should not "leave [the intervenors] temporally stranded in the present." Id. (quoting Utah v. Am. Pipe & Constr. Co., 473 F.2d 580, 584 (9th Cir. 1973)). The Ninth Circuit further held that the nonparty members had eleven days in which to file their motions to intervene--thus the filing of motions to intervene after only eight days was timely. Am. Pipe, 473 F.2d at 584.

(34.) Am. Pipe, 414 U.S. at 553.

(35.) Id. at 551; see also id. at 553 ("A contrary rule allowing participation only by those potential members of the class who had earlier filed motions to intervene in the suit would deprive Rule 23 class actions of the efficiency and economy of litigation which is a principal purpose of the procedure.").

(36.) Id. at 550 (citations omitted).

(37.) Id. at 554.

(38.) Id. at 555.

(39.) Id. ("Since the imposition of a time bar would not in this circumstance promote the purposes of the statute of limitations, the tolling rule we establish here is consistent both with the procedures of Rule 23 and with the proper function of the limitations statute."). See infra Part II.B for a discussion of the policy goals behind statutes of limitations.

(40.) Am. Pipe, 414 U.S. at 558.

(41.) Id. at 556-58; see Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95, 109 (2d Cir. 2013) ("Permitting a plaintiff to file a complaint or intervene after the repose period set forth in Section 13 of the Securities Act has run would therefore necessarily enlarge or modify a substantive right and violate the Rules Enabling Act."), cert, granted sub nom. Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., 134 S. Ct. 1515 (2014), cert, dismissed as improvidently granted, No. 13-640, 2014 WL 4799891 (Sept. 29,2014).

(42.) Am. Pipe, 414 U.S. at 558 (citing Burnett v. N.Y. Cent. R.R. Co., 380 U.S. 424 (1965); Herb v. Pitcairn, 325 U.S. 77 (1945)).

(43.) See id. at 559 (holding that "the mere fact that a federal statute providing for substantive liability also sets a time limitation upon the institution of suit does not restrict the power of the federal courts to hold that the statute of limitations is tolled under certain circumstances not inconsistent with the legislative purpose" (emphasis added)).

(44.) Id.

(45.) Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983).

(46.) Id. at 353-54.

(47.) See id. (holding that the American Pipe tolling rule applied to employment-discrimination suits).

(48.) Id. at 354.

(49.) For a discussion of the circuit split over these issues, see infra Part II.

(50.) See infra Part III.

(51.) See infra notes 166-67 and accompanying text.

(52.) See Susan C. Randall, Due Process Challenges to Statutes of Repose, 40 Sw. L.J. 997, 1002 (1986) ("Strictly speaking, 'statute of repose' is a generic term of which a statute of limitation is but a variety." (citing Wood v. Carpenter, 101 U.S. 135, 139 (1879)).

(53.) Developments in the Law--Statutes of Limitation, 63 HARV. L. Rev. 1177, 1200 (1950).

(54.) CTS Corp. v. Waldburger, 134 S. Ct. 2175, 2182 (2014).

(55.) Id. at 2183.

(56.) See infra Part III.

(57.) See supra notes 10,13.

(58.) For example, a court may equitably toll a statute of limitations "where the party injured by the fraud remains in ignorance of it without any fault or want of diligence or care on his part." Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 363 (1991) (quoting Bailey v. Glover, 88 U.S. (21 Wall.) 342, 348 (1874)); see also Joseph v. Wiles, 223 F.3d 1155, 1166 (10th Cir. 2000) (insisting that most courts recognize equitable tolling "where, for example, the claimant has filed a defective pleading during the statutory period, or where the plaintiff has been induced or tricked by his adversary's misconduct into allowing the filing deadline to pass" (citations omitted)).

(59.) Coleman v. Johnson, 184 F.3d 398,402 (5th Cir. 1999).

(60.) Martinez v. United States, 333 F.3d 1295, 1318 (Fed. Cir. 2003) (citing Irwin v. Dep't of Veterans Affairs, 498 U.S. 89, 96 (1996)).

(61.) Credit Suisse Sec. (USA) LLC v. Simmons, 132 S. Ct. 1414, 1419 n.6 (2011) ("[S]ome federal courts have used [legal tolling] to describe our holding on the ground that the rule 'is derived from a statutory source,' whereas equitable tolling is 'judicially created.'" (citing Arivella v. Lucent Techs., Inc., 623 F. Supp. 2d 164, 176 (D. Mass. 2009))). Class-action tolling treats members of a putative class as if they have already commenced their own actions for purposes of the limitations period. "[T]he filing of a class action, in a classic legal fiction, causes the courts to treat 'members of the asserted class' as if they 'hav[e] instituted their own actions, at least so long as they continue to be members of the class ...' and they have 'the benefit of tolling ... for so long as the class action purports to assert their claims.'" State Farm Mut. Auto. Ins. Co. v. Boellstorff, 540 F.3d 1223, 1229 (10th Cir. 2008) (quoting In re WorldCom Sec. Litig., 496 F.3d 245, 255 (2d Cir. 2007)).

(62.) Wiles, 223 F.3d at 1167 (citation omitted).

(63.) Lampf, 501 U.S. 350.

(64.) Id. at 353.

(65.) Id. at 363.

(66.) Id.

(67.) Id.

(68.) See, e.g., Footbridge Ltd. Trust v. Countrywide Fin. Corp., 770 F. Supp. 2d 618, 624 (S.D.N.Y. 2011) ("It is settled that a federal statute of repose is not subject to equitable tolling." (citing Lampf, 501 U.S. at 363)). But see generally Lyman Johnson, Securities Fraud and the Mirage of Repose, 1992 WlS. L. Rev. 607 (arguing that the Supreme Court in Lampf wrongly conflated two issues--fraud and fraudulent concealment--thereby too broadly limiting equitable tolling of statutes of repose).

(69.) See, e.g., Joseph v. Wiles, 223 F.3d 1155, 1166 (10th Cir. 2000) ("Lampf ... [is] not relevant in the present context because the tolling that Mr. Joseph seeks is legal rather than equitable in nature.").

(70.) The Supreme Court explicitly endorsed Lampf's approach in CTS Corp. v. Waldburger, 134 S. Ct. 2175 (2014), holding that "[s]tatutes of limitations, but not statutes of repose, are subject to equitable tolling...." Id. at 2183. In this case, the Supreme Court was asked to decide whether [section] 9658 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 preempts state statutes of repose in addition to state statutes of limitations. Id. at 2181. After reviewing the distinctions between statutes of limitations and statutes of repose, the Court held that "[w]hile it is apparent from the historical development of the two terms that their general usage has not always been precise, their distinction was well enough established to be reflected in the 1982 Study Group Report that guided [section] 9658's enactment" and so "it is proper to conclude that Congress did not intend to preempt statutes of repose." Id. at 2179. The opinion, although stating that statutes of repose "generally may not be tolled," does not preclude the limited tolling exception argued for in this Note. Id. at 2183.

(71.) See Footbridge, 770 F. Supp. 2d at 625-26 ("In light of Lampf, this Court holds ... that section 13 of the '33 Act is not subject to equitable tolling.... This Court concludes that American Pipe tolling is not a form of legal or statutory tolling, but is a form of equitable tolling.").

(72.) Wiles, 223 F.3d at 1166.

(73.) Id. at 1166-67 ("[T]he tolling Mr. Wiles claims is the legal tolling that occurs any time an action is commenced and class certification is pending." (citation omitted)).

(74.) Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95, 109 (2d Cir. 2013), cert, granted sub nom. Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., 134 S. Ct. 1515 (2014), cert, dismissed as improvidently granted, No. 13-640, 2014 WL 4799891 (Sept. 29, 2014).

(75.) See infra Part II.

(76.) See First United Methodist Church of Hyattsville v. U.S. Gypsum Co., 882 F.2d 862, 866 (4th Cir. 1989) ("A statute of repose creates a substantive right in those protected to be free from liability after a legislatively-determined period of time.... [A] statute of repose is typically an absolute time limit beyond which liability no longer exists and is not tolled for any reason....").

(77.) See Albano v. Shea Homes Ltd. P'ship, 254 P.3d 360, 365-66 (Ariz. 2011) (answering certified questions from Albano v. Shea Homes Limited Partnership, 634 F.3d 524 (9th Cir. 2011), and holding that whether American Pipe tolling is deemed equitable or legal, the statute of repose for A.R.S. [section] 12-552 may not be tolled, but leaving open the possibility that a statute of repose for another statute may be tolled where "consonant with the legislative scheme" (quoting Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 558 (1974))).

(78.) See supra Part I. A.

(79.) See infra Part III.

(80.) Joseph v. Wiles, 223 F.3d 1155,1157-58 (10th Cir. 2000).

(81.) Id. at 1157-58.

(82.) Id. at 1168.

(83.) Id.

(84.) See id. at 1167 ("Lampf did not overrule or even mention [Crown], and we are not persuaded [they] are incompatible.").

(85.) See id. (concluding that "[tjolling the limitations period for class members while class certification is pending serves the purposes of Rule 23," namely to eliminate the need for class members to file individual actions and the possible unfairness to the plaintiff class, which '"may be led by the very existence of the lawsuit to neglect their rights until after a negative ruling on [the class certification]--by which time it may be too late for the filing of independent actions'" (quoting 7B CHARLES Alan WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL Practice and Procedure [section] 1795, at 325 (2008))).

(86.) Id. at 1168 ("Defendants' potential liability should not be extinguished simply because the district court left the class certification issue unresolved.").

(87.) Id. at 1167. For further discussion of the policy behind statutes of repose, see infra Part III.

(88.) See, e.g., Me. State Ret. Sys. v. Countrywide Fin. Corp., 722 F. Supp. 2d 1157, 1166-67 (C.D. Cal. 2010) ("[T]he Court follows multiple other courts that have held in federal cases that the statute is tolled only as to claims where the named plaintiffs had standing."); In re Flag Telecom Holdings, Ltd. Sec. Litig., 352 F. Supp. 2d 429, 457 (S.D.N.Y. 2005) (allowing tolling of the limitations period on plaintiffs [section] 12(a)(2) claims); cf. Hall v. Variable Annuity Life Ins. Co., 727 F.3d 372, 378 (5th Cir. 2013) (holding that court's vacatur of class certification "caused American Pipe tolling to cease and the statute of repose to resume running").

(89.) Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95, 101-02 (2d Cir. 2013), cert, granted sub nom. Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., 134 S. Ct. 1515 (2014), cert, dismissed as improvidently granted, No. 13-640, 2014 WL 4799891 (Sept. 29, 2014).

(90.) Id. at 102. Mortgage-backed securities are a type of debt instrument that entitles the holder to a stream of cash from the underlying pool of mortgage loans that make up the instrument. U.S. SEC. & EXCH. COMM'N, Mortgage-Backed Securities, http://www.sec.gov/ answers/mortgagesecurities.htm (last visited Sept. 6, 2014). The underlying loans are purchased and assembled by governmental or private entities from banks, mortgage companies, and other originators. Id. Mortgage-backed securities may be divided into "tranches," designations which determine the order in which investors will be paid in the event of borrower default. William K. Sjostrom, Jr., The AIG Bailout, 66 Wash. & LEE L. Rev. 943,959 (2009).

(91.) IndyMac, 721 F.3d at 102.

(92.) Id. The PSLRA requires the court to appoint a lead plaintiff within ninety days of the date when a putative class is established. 15 U.S.C. [section] 78u-4(a)(3)(B)(i) (2012). In IndyMac, the class certification and appointment of a lead plaintiff may have been the start of the problem--the court placed the plaintiffs at a disadvantage by first certifying the class, then subsequently denying class certification after the running of the limitations period. IndyMac, 721 F.3d at 102-03.

(93.) IndyMac, 721 F.3d at 102-03.

(94.) See id. at 103 ("[T]he Amended Consolidated Complaint ... raised claims on behalf of other asserted class members, who were purchasers of the IndyMac Certificates.").

(95.) Id. Note that, after IndyMac was decided at the district court level, the Second Circuit decided in NECA-IEBW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145 (2d Cir. 2012), that under certain circumstances a purchaser may assert a class on behalf of purchasers of other tranches of securities within the same offering. Id. at 158. Courts are split on this issue of whether a mortgage-backed securities class action requires only a single tranche of securities. Daniel Slifkin, The Changing Landscape of Securities Litigation, ASPATORE, 2014 WL 1245074, at *4 (Apr. 2014).

(96.) IndyMac, 721 F.3d at 103. Many courts would question the district court's finding here that the named plaintiff lacked standing to raise the unnamed, asserted class members' claims. See, e.g., In re Morgan Stanley Mortg. Pass-Through Certificates Li tig., 810 F. Supp. 2d 650, 669 (S.D.N.Y. 2011) (holding that American Pipe's, logic "applies with equal force to cases in which the ultimate viability of the putative class action hinges on the question of whether the named representative has standing"). Some scholars argue that such a finding places an onerous burden, "wholly at odds with the purpose and plain language of American Pipe," on asserted class members to investigate the named plaintiff's standing. See Julie Goldsmith Reiser & Elizabeth C. Guarnieri, The Misapplication of American Pipe Tolling Principles, 21 SEC. LlTIG. J. 2, 3 (Winter 2011). This rule would also increase unnamed plaintiffs' incentive to file duplicative actions for fear of losing the ability to raise their claims. Id. at 1. Finally, such a "narrow tranche-based standing analysis ... effectively guts the protection provided by American Pipe." Barbara J. Hart & David C. Harrison, Don't Bend 'American Pipe', N.Y. L.J., Nov. 7, 2012. Despite the debate, the Second Circuit has not yet directly addressed whether American Pipe tolling applies when the original plaintiff lacked standing. Monroe Cnty. Emps.' Ret. Sys. v. YPF Sociedad Anonima, 980 F. Supp. 2d. 487,489 (S.D.N.Y. 2013) ("IndyMac never decided whether American Pipe tolling applied despite the initial plaintiffs lack of standing because it found that American Pipe tolling does not apply to Section 13's statute of repose under any circumstances.").

(97.) IndyMac, 721 F.3d at 103.

(98.) Id. at 101. Rule 24 allows a party to intervene where that party, "claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest." FED. R. Civ. P. 24(a)(2).

(99.) Under the relation-back doctrine, an amendment may relate back to the date of the original pleading where, for example, the law providing the applicable statute of limitations allows relation back, or the amendment asserts a claim that arose out of the same conduct as in the original pleading. FED. R. Civ. P. 15(c)(1).

(100.) IndyMac, 721 F.3d at 101.

(101.) Id.

(102.) Id. at 103.

(103.) Id. at 105 ("The American Pipe Court, however, also seemed to rely on the equitable power of the courts to toll statutes of limitations.").

(104.) Id. at 106 ("[A] statute of repose is 'subject [only] to legislatively created exceptions'...." (quoting P. Stolz Family P'ship L.P. v. Daum, 355 F.3d 92, 102 (2d Cir. 2004) (second alteration in original))).

(105.) Id. (quotation mark omitted) (quoting Amoco Prod. Co. v. Newton Sheep Co., 85 F.3d 1464, 1472 (10th Cir. 1996)).

(106.) Id. at 107.

(107.) Id. at 108.

(108.) Id. at 109.

(109.) Id. For a discussion of the Rules Enabling Act, see infra Part IV.

(110.) The Second Circuit wrote that it "need not address this issue, or whether Rule 15(c) allows 'relation back' of claims otherwise barred by a statute of repose, because the proposed intervenors in this case may not create jurisdiction for their claims by intervening as named plaintiffs." IndyMac, 721 F.3d at 110 n.18. The court held that because plaintiffs lacked jurisdiction when the suit was filed, they could not repair jurisdiction through the intervention of a plaintiff with a justiciable claim. Id. at 111. The court did not mention that the reason the nonparty members were not originally named parties was that the court had previously consolidated the actions under the Wyoming entities. Id. Further discussion of the relation-back doctrine is beyond the scope of this Note.

(111.) The courts are engaging in legal-equitable categorization, despite acknowledging that the American Pipe decision itself does not focus on this distinction. See IndyMac, 721 F.3d at 107 ("The Supreme Court's opinion in American Pipe does not explicitly state whether the Court was recognizing 'judicial tolling,' grounded in principles of equity, or statutory tolling (or, 'legal' tolling), based on Rule 23." (citation omitted)).

(112.) Courts disagree to some extent over whether the American Pipe tolling rule constitutes legal or equitable tolling. See, e.g., Albano v. Shea Homes Ltd. P'ship, 634 F.3d 524, 535 (9th Cir. 2011) ("[Tjhere is no consensus [on] whether American Pipe tolling should be characterized as a legal tolling doctrine or as an equitable one."); Bright v. United States, 603 F.3d 1273, 1282 (Fed. Cir. 2010) (describing American Pipe as "statutory" tolling); Bridges v. Dep't. of Md. State Police, 441 F.3d 197, 211 (4th Cir. 2006) ("The American Pipe/Crown, Cork & Seal equitable tolling rule is a limited exception to the universal rule that statutes of limitations are impervious to equitable exceptions."); Joseph v. Wiles, 223 F.3d 1155, 1167 (10th Cir. 2000) (describing American Pipe as "legal" tolling).

(113.) IndyMac, 721 F.3d at 105.

(114.) Wiles, 223 F.3d at 1166-67 (emphasis added).

(115.) IndyMac, 721 F.3d at 106 (quoting Amoco Prod. Co. v. Newton Sheep Co., 85 F.3d 1464,1472 (10th Cir. 1996)) (alteration in original) (emphasis omitted).

(116.) Wiles, 223 F.3d at 1168.

(117.) Id.

(118.) Compare IndyMac, 721 F.3d at 109 (concluding that tolling [section] 13's statute of repose would violate the Rules Enabling Act), with Wiles, 223 F.3d at 1168 (tolling [section] 13's statute of repose).

(119.) IndyMac, 721 F.3d at 109.

(120.) Wiles, 223 F.3d at 1168.

(121.) Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 559 (1974) ("[T]he mere fact that a federal statute providing for substantive liability also sets a time limitation upon the institution of suit does not restrict the power of the federal courts to hold that the statute of limitations is tolled under certain circumstances not inconsistent with the legislative purpose.").

(122.) See IndyMac, 721 F.3d at 104-10,105 n.12 (analyzing the American Pipe tolling rule by focusing on whether the requested tolling of a statute of repose is equitable or legal, and by parsing the text of Rule 23).

(123.) CTS Corp. v. Waldburger, 134 S. Ct. 2175, 2178 (2014) ("There is considerable common ground in the policies underlying the two types of statute.").

(124.) See, e.g., Pashley v. Pac. Elec. Co., 153 P.2d 325, 326 (Cal. 1944) (quoting 1 HORACE G. Wood, A Treatise on the Limitation of Actions at Law and in Equity [section] 4, at 8-9 (4th ed. 1916)) (observing that a "statute of limitations is a statute of repose, enacted as a matter of public policy to fix a limit within which an action must be brought, or the obligation is presumed to have been paid"); see infra notes 166-67 and accompanying text.

(125.) See supra note 124 and accompanying text.

(126.) "The statute of limitations is a complete bar to actions that do not meet its time limits. It is no way dependent on the merits of the case." Victor E. Schwartz, David F. Partlett & Kathryn Kelly, Prosser, Wade and Schwartz's Torts: Cases and Materials 617 (11th ed. 2005).

(127.) Michael J. Kaufman & John M. Wunderlich, Toward a Just Measure of Repose: The Statute of Limitations for Securities Fraud, 52 WM. & MARY L. Rev. 1547, 1558 (2011) ("The statute of limitations creates an affirmative defense when a plaintiff fails to sue within a specified time after the plaintiff discovers the cause of action, although it is often subject to tolling principles." (citing Ma v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 597 F.3d 84, 88 n.4 (2d Cir. 2010); Tello v. Dean Witter Reynolds, Inc., 494 F.3d 956, 974 (11th Cir. 2007); Johnson v. Aljian, 490 F.3d 778, 782 n.13 (9th Cir. 2007))).

(128.) Cf. Securities Act of 1933 [section] 13,15 U.S.C. [section] 77m (2012) (providing that [section] 13's statute of repose is triggered "within one year after the discovery" of the false statement "or after such discovery should have been made by the exercise of reasonable diligence").

(129.) Kaufman & Wunderlich, supra note 127, at 1559 ("[Statutes of repose are often longer, capping the time for liability, and are triggered by the complained of event (event-accrual)." (citations omitted)).

(130.) Tyler T. Ochoa & Andrew J. Wistrich, The Puzzling Purposes of Statutes of Limitations, 28 PAC. L.J. 453, 454-55 (1997).

(131.) The idea of repose includes several distinct but related concepts--providing the defendant with peace of mind, honoring settled expectations, reducing uncertainty about the future, and lowering the costs incurred by potential defendants to prevent untimely claims. Id. at 460; see also Kaufman & Wunderlich, supra note 127, at 1605 ("[Rjepose protects settled economic expectations of not just the defendant, but a multitude of economic actors. Repose protects nonculpable market players such as investors, employees, and lenders, to name a few." (citation omitted)).

(132.) Ochoa & Wistrich, supra note 130, at 460; see 1 HORACE G. WOOD, A Treatise ON the Limitation of Actions at Law and in Equity [section] 4, at 8-9 (4th ed. 1916) (citations omitted) ("[Statutes of limitations] rest upon sound policy, and tend to the peace and welfare of society.").

(133.) See Lyon v. Agusta S.P.A., 252 F.3d 1078, 1086 (9th Cir. 2001) ("[A] statute of repose proceeds on the basis that it is unfair to make somebody defend an action long after something was done or some product was sold.").

(134.) See Kaufman & Wunderlich, supra note 127, at 1591 n.225 ("Statutes of repose are premised on the idea 'that a time should arrive when a person is no longer responsible for a past act.'" (quoting SCHWARTZ ET AL., supra note 126, at 617)); Patrick J. Kelley, The Discovery Rule for Personal Injury Statutes of Limitations: Reflections on the British Experience, 24 Wayne L. Rev. 1641, 1644 (1978) ("Ordinarily, one wronged by another's conduct will seek legal redress fairly soon after the injury.... [T]he accused wrongdoer may reasonably expect that he will not be sued long after the event. He may then argue that a long-delayed suit is a wrong to him, regardless of its substantive merits."); id. at 1645 ("The claimant's inaction has lulled the defendant into a false sense of security. A long-delayed suit dashes the expectations raised by society and by the claimant's own conduct. The lawsuit is an unfair surprise.").

(135.) See United States v. Kubrick, 444 U.S. Ill, 117 (1979) (noting that statutes of limitations "protect defendants and the courts from having to deal with cases in which the search for truth may be seriously impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents, or otherwise"); Bell v. Morrison, 26 U.S. 351, 360 (1828) (noting that statutes of limitations "afford security against stale demands, after the true state of the transaction may have been forgotten, or be incapable of explanation, by reason of the death or removal of witnesses").

(136.) See WOOD, supra note 132, [section] 4, at 8 ("[T]he object of [statutes of limitations] is to prevent fraudulent and stale actions from springing up after a great lapse of time." (citation omitted)).

(137.) Richard A. Epstein, The Temporal Dimension in Tort Law, 53 U. CHI. L. Rev. 1175, 1182 (1986) ("The passage of time is positively correlated with both of the costs just identified: the expense of litigation and the error rate."); Patricia M. Danzon, Tort Reform and the Role of Government in Private Insurance Markets, 13 J. LEGAL STUD. 517, 534 (1984) ("[D]elay leads to decay of evidence, blurs the chain of causation, adds multiple defendants, and hence increases litigation expense.").

(138.) See Kubrick, 444 U.S. at 117 (explaining that statutes of limitations "protect defendants and the courts from having to deal with cases in which the search for truth may be seriously impaired by the loss of evidence"); Ochoa & Wistrich, supra note 130, at 481 ("If it were widely believed that judicial decisions are no more accurate than tossing a coin, courts would lose their legitimacy as a forum for the resolution of disputes, and disputants would seek their remedies elsewhere.").

(139.) Ochoa & Wistrich, supra note 130, at 484.

(140.) See Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 353 (1983) ("The defendant will be aware of the need to preserve evidence and witnesses respecting the claims of all members of the class. Tolling the statute of limitations thus creates no potential for unfair surprise...."); John J. Clarke Jr. & Megan K. Vesely, For Whom American Pipe Tolls, or Doesn't, Law 360 (May 24, 2011, 11:25 AM), http://www.law360.com/articles/246510 ("Statutes of limitations are designed to guard against 'stale claims.' They 'bear on the availability of remedies and, as such, are subject to equitable defenses ..., the various forms of tolling, and potential application of the discovery rule.'" (quoting P. Stolz Family P'ship L.P. v. Daum, 355 F.3d 92, 102 (2d Cir. 2004))).

(141.) See Crown, 462 U.S. at 352 ("Limitations periods are intended ... to prevent plaintiffs from sleeping on their rights." (citations omitted)); 1 JOHN NORTON POMEROY, A TREATISE ON Equity JURISPRUDENCE [section] 418 (4th ed. 1918) ("Equity aids the vigilant, not those who slumber on their rights."). Similarly, the equitable doctrine of laches, which functions like a flexible statute of limitations, discourages plaintiffs from sleeping on their rights. See Gladden v. Bd. of Trs. of Pub. Emps.' Ret. Sys., 409 A.2d 294, 297 (N.J. Super. Ct. App. Div. 1979) ("The policy behind [laches] is the discouragement of stale claims.").

(142.) Barrington v. A.H. Robins Co., 702 P.2d 563, 566 (Cal. 1985) (citation omitted).

(143.) Cf. Fleming James, Jr., Geoffrey C. Hazard, Jr. & John Leubsdorf, Civil PROCEDURE [section] 1.1, at 2 (4th ed. 1992) ("In its day-to-day application, the law of procedure implements substantive law.").

(144.) Ochoa & Wistrich, supra note 130, at 182 (citations omitted); id. at 182 n.214 ("If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his [or her] claim on the merits.") (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).

(145.) See Edmond N. Cahn, The Sense of Injustice 24-25 (1949) (stating that "the human animal is predisposed to fight injustice").

(146.) CTS Corp. v. Waldburger. 134 S. Ct. 2175, 2187 (2014).

(147.) See, e.g., id. at 2183 ("Statutes of repose effect a legislative judgment that a defendant should 'be free from liability after the legislatively determined period of time.'"); Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95, 106 (2d Cir. 2013) (explaining that statutes of repose "create)] a substantive right in those protected to be free from liability after a legislatively-determined period of time" and "may bar a claim even before the plaintiff suffers injury, leaving her without any remedy" (citations omitted)), cert, granted sub nom. Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., 134 S. Ct. 1515 (2014), cert, dismissed as improvidently granted, No. 13-640, 2014 WL 4799891 (Sept. 29, 2014).

(148.) See Gates Rubber Co. v. USM Corp, 508 F.2d 603, 611 (7th Cir. 1975). [I]t is useful to note that a statute of limitations effectuates two quite different policies. First, such a statute is intended to protect defendants from false or fraudulent claims that might be difficult to disprove if not brought until after relevant evidence has been lost or destroyed and witnesses have become unavailable. Second, entirely apart from the merits of particular claims, the interest in certainty and finality in the administration of our affairs, especially in commercial transactions, makes it desirable to terminate contingent liabilities at specific points in time. It is this interest in finality which underlies the description of a limitations act as a "statute of repose." (footnote omitted). Id.

(149.) Francis E. McGovern, Symposium Products Liability: The Variety, Policy and Constitutionality of Product Liability Statutes of Repose, 30 Am. U. L. REV. 579, 583 (1981).

(150.) See supra note 134 and accompanying text.

(151.) Ochoa & Wistrich, supra note 130, at 506.

(152.) See WOOD, supra note 132, [section] 4, at 10 ("[L]aws of limitation are to be encouraged; yet, as they are acts which take away existing rights, they should always be construed with reasonable strictness, and in favor of the rights sought to be defeated thereby, so far as is consistent with their letter and spirit.").

(153.) See Johnson, supra note 68, at 640 ("[T]he theory ... that even if one has a just claim it is unjust not to put the adversary on notice to defend does not apply to one who, by concealing wrongdoing, is so obviously already 'on notice' and is evidently seeking 'to defend'....").

(154.) Sherwood v. Sutton, 21 F. Cas. 1303, 1307 (Story, Circuit Justice, C.C.D.N.H. 1828) (No. 12,781).

(155.) See Johnson, supra note 68, at 633 ("Are there some instances where, notwithstanding a lapsed limitations period and the policy of repose it represents, certain behavior by defendants is of such a character that the balance of interests swings away from repose and back toward 'protecting valid claims?' For centuries, the answer has been 'yes.' Repose is a contingent legal value, not an absolute and unqualified one. Its solace is often withheld.").

(156.) See, e.g., P. Stolz Family P'ship L.P. v. Daum, 355 F.3d 92, 105 (2d Cir. 2004) (finding that tolling does not undermine Congress's intent to prevent "lingering liability"); In re Katrina Canal Breaches Consol. Litig., No. 05-4182, 2008 WL 2692674, at *3 (E.D. La. July 2, 2008) ("It would not undermine the purposes of statutes of limitations to give the benefit of tolling to all those who are asserted to be members of the class for as long as the class action purports to assert their claims.").

(157.) See Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95, 102 (2d Cir. 2013) (explaining that plaintiffs initially brought several suits against defendants that were subsequently consolidated into a single suit with one named plaintiff by the court), cert, granted sub nom. Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., 134 S. Ct. 1515 (2014), cert, dismissed as improvidently granted, No. 13-640, 2014 WL 4799891 (Sept. 29, 2014).

(158.) Id.

(159.) See supra note 134 and accompanying text.

160. IndyMac, 721 F.3d at 102.

(161.) See supra note 140 and accompanying text.

(162.) IndyMac, 721 F.3d at 103.

(163.) Id. at 109 ("The Rules Enabling Act provides the Supreme Court 'the power to prescribe general rules of practice and procedure,' including the Federal Rules of Civil Procedure.... Accordingly, 'the Rules Enabling Act forbids interpreting Rule 23 to "abridge, enlarge or modify any substantive right.'"" (citations omitted)).

(164.) Id.

(165.) Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 556 (1974).

(166.) Supreme Court case law from before the 1980s frequently conflated the terms "statutes of repose" and "statutes of limitation" at both a linguistic and conceptual level. See, e.g., United States v. Kubrick, 444 U.S. Ill, 117 (1979) ("Statutes of limitations ... are statutes of repose...."); United States v. Powell, 379 U.S. 48, 59-60 (1964) (Douglas, J., dissenting) ("Here we have a congressional 'statute of repose' embodied in the three-year statute of limitations."); Pillow v. Roberts, 54 U.S. 472, 477 (1851) ("Statutes of limitations are founded on sound policy. They are statutes of repose, and should not be evaded by a forced construction."). Circuit court opinions from this period also reveal a general confusion of these terms. See, e.g., Gates Rubber Co. v. USM Corp., 508 F.2d 603, 611-12 (7th Cir. 1975) (using "statutes of limitations" as a general term throughout the opinion, but also differentiating limitations rules that serve as "true statute[s] of repose").

(167.) Kubrick, 444 U.S. at 117.

(168.) In American Pipe, the defendant argued that [section] 4B of the Clayton Act should be treated as a substantive limitation protected from tolling under the Rules Enabling Act, an argument the Supreme Court expressly rejected, finding that tolling applied regardless of whether the limitation was substantive or procedural. Am. Pipe, 414 U.S. at 556-59. That modern courts treat [section] 4B of the Clayton Act as a procedural limitation subject to equitable tolling is irrelevant here. See Rx.com v. Medco Health Solutions, Inc., 322 F. App'x 394, 398 (2009) (holding that [section] 4B of the Clayton Act is a procedural limitation subject to equitable tolling).

(169.) Am. Pipe, 414 U.S. at 557-58.

(170.) Id. at 558.

(171.) Id. at 554-56; see also In re Morgan Stanley Mortg. Pass-Through Certificates Litig., 810 F. Supp. 2d 650, 666 (noting that the American Pipe decision was motivated by legislative purpose).

(172.) See 1 JOSEPH M. MCLAUGHLIN, McLaughlin ON CLASS ACTIONS [section] 3:15 (9th ed. 2012) (noting the Supreme Court's focus in American Pipe on whether tolling is consistent with the "legislative scheme").

(173.) See Norris v. Wirtz, 818 F.2d 1329, 1332 (7th Cir. 1987) ("The legislative history in 1934 makes it pellucid that Congress included statutes of repose because of fear that lingering liabilities would disrupt normal business and facilitate false claims."); 73 CONG. REC. S10.186 (daily ed. June 1, 1934) (statement of Sen. Byrnes) (observing that "the amendments adopted today give greater assurance to the honest officials of a corporation").

(174.) Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95, 106 (2d Cir. 2013), cert, granted sub nom. Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., 134 S. Ct. 1515 (2014), cert, dismissed as improvidently granted, No. 13-640, 2014 WL 4799891 (Sept. 29, 2014); see also Am. Pipe, 414 U.S. at 554 (finding tolling "is in no way inconsistent with the functional operation of a statute of limitations").

(175.) IndyMac, 721 F.3d at 102.

(176.) Id.

(177.) Rule 23 provides a mechanism for "one or more members of a class [to] sue or be sued as representative parties on behalf of all members." Fed. R. Civ. P. 23.

(178.) Stephen C. Yeazell, From Medieval Group Litigation to the Modern Class Action 229, 232 (1987).

(179.) 15 U.S.C. [section] 78u-4 (2012). Congress enacted the PSLRA to lower the defendants' costs of defending what was viewed as vexatious securities litigation by aggregating individual claims. S. REP. No. 104-98, at 4 (1995), reprinted in 1995 U.S.C.C.A.N. 679, 683-84; see also William B. Rubenstein, A Transactional Model of Adjudication, 89 Geo. L.J. 371, 419-20 (2001) (arguing that complex, pro-business litigation seeks to aggregate as many claims as possible against the defendant); cf. Michael K. Kaufman & John M. Wunderlich, The Unjustified Judicial Creation of Class Certification Merits Trials in Securities Fraud Actions, 43 U. MICH. J.L. REFORM 323, 345, 348-49 (2010) (arguing that Congress, in enacting the PSLRA, made an affirmative choice to promote aggregation of securities claims by failing to impose heightened class-certification standards).

(180.) 15 U.S.C. [section] 78u-4.

(181.) See IndyMac, 721 F.3d at 112 ("Our holding today merely reemphasizes that 'the [PSLRA] was ... certainly not intended to excuse sophisticated parties [such as proposed intervenors] from being diligent and keeping abreast of developments in the case, specifically when the class is not certified.'" (quoting Emp'rs-Teamsters Local Nos. 175 & 505 Pension Trust Fund v. Anchor Capital Advisors, 498 F.3d 920, 925 (9th Cir. 2007))), cert, granted sub nom. Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., 134 S. Ct. 1515 (2014), cert, dismissed as improvidently granted, No. 13-640, 2014 WL 4799891 (Sept. 29, 2014). The Second Circuit's reasoning misses the mark. Even if the IndyMac plaintiffs had diligently kept "abreast of developments in the case," they still would have been left without remedy because the court decided to decertify the class only after the repose period had run. Id. at 103.

(182.) Id. at 102.

(183.) See Rubenstein, supra note 179, at 399 ("A party that believes it has been defrauded of millions of dollars typically has sufficient incentive to file an individual lawsuit.").

(184.) Steven T.O. Cottreau, The Due Process Right to Opt Out of Class Actions, 73 N. Y.U. L. REV. 480, 484-85 (1998). Rule 23 provides an express right to opt out of (b)(3) classes--those where the members' causes of action share common questions of law and fact--and courts selectively allow plaintiffs to opt out of all others. Fed. R. Civ. P. 23 advisory committee's note.

(185.) See Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 553 (1974) ("A contrary rule allowing participation only by those potential members of the class who had earlier filed motions to intervene in the suit would deprive Rule 23 class actions of the efficiency and economy of litigation which is a principal purpose of the procedure." (emphasis added)); Rhonda Wasserman, Dueling Class Actions, 80 B.U. L. REV. 461, 470 (2000) (explaining the strain on courts resulting from dueling actions, including duplication of effort and waste of judicial resources).

CHRISTINE E. TURNER, Duke University School of Law, J.D. expected 2015; Boston College, B.A. 2010. Thank you to Professor James D. Cox for his helpful insights; to the editors of the Duke Law Journal for their excellent comments; and to my friends and family for their endless support.
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